US President Donald Trump has intensified the rhetoric in the trade war against China and announced a 90-day pause on import tariffs for other trading partners wishing to negotiate.
During this pause, these partners will face a reduced tariff rate of 10%, including the EU. Trump made this announcement on his social media platform on Wednesday night. For Chinese products, he increased import tariffs to 125%.
"Based on the lack of respect China has shown to the global markets, I am hereby raising the tariff that the United States charges China to 125%, effective immediately," Trump stated. "At some point, hopefully in the near future, China will realise that the days of cheating the US and other nations are no longer sustainable or acceptable."
"Conversely, and based on the fact that representatives from over 75 countries have contacted US officials, including from the Departments of Commerce, Treasury, and the USTR, to negotiate solutions on trade-related issues...and that these countries, at my strong suggestion, have not retaliated against the US, I have authorised a 90-day PAUSE and a significantly reduced reciprocal tariff of 10%, effective immediately." wrote the US President on social media.
Following Trump’s announcement on Wednesday, Wall Street surged.
The US President admitted monitoring the decline in the US debt market before deciding to pause the trade war with the rest of the world, except China.
"I was keeping an eye on the bond market. It's a very complex market," the president said to the media on Wednesday. He stated that he noticed his tariff increases were causing some fear on Tuesday evening.
"We need to be flexible," he explained when discussing his decision to pause import tariffs for 90 days and reduce them to 10 percent.
The pause does not apply to China, which faces tariffs of 125 percent. However, Trump remains optimistic that a negotiated solution can be found.
"China wants to make a deal," he said. "They just don't really know how to go about it."
According to him, the Chinese people are "proud" and President Xi Jinping is "a proud man." Trump believes that China will "find a way."
Asian stock markets opened significantly higher on Thursday morning.
